Consolidated Unaudited Interim Report of AS PRFoods for the 2nd quarter and 6 months of 2021/2022 financial year

MANAGEMENT COMMENTARY 2021 is over and with it also marks the end of Finnish saga. As disclosed, we have sale agreement of 100% shares of Heimon Kala Oy. Even if to consider slight improvement in group operational EBITDA, it was clear that without consolidation it would have been challenging for Heimon Kala Oy to remain an independent company. Multiple management mistakes and constant sale of private label products below cost price, led to decision that selling Heimon Kala Oy is rational...

Tallinn, 16/02/2022 (informazione.news - comunicati stampa - cibi e bevande)

2021 is over and with it also marks the end of Finnish saga. As disclosed, we have sale agreement of 100% shares of Heimon Kala Oy. Even if to consider slight improvement in group operational EBITDA, it was clear that without consolidation it would have been challenging for Heimon Kala Oy to remain an independent company. Multiple management mistakes and constant sale of private label products below cost price, led to decision that selling Heimon Kala Oy is rational decision rather than to keep restructuring and recapitalizing the business. The origin of losses in Finland is the incompetence of Finnish management in 2020 and 2021 to price products and manage cost base. Private label prices offered at the end of 2020 and beginning to 2021 (the pricing cycle in Finland is 6 months forward), didn´t not match raw material prices. In summer 2021 then current management decided to increase production, that caused additional losses, as sales were below cost. After changing the management in fall, company took new direction that took into account real market situation (raw material price increases were record high end of 2021) and these changes have taken effect by now.

Even as we managed to improve group operational EBITDA by 25%, as again whole loss in Q2 and H1 originated from Finland. H1 2021 results per company compared to H1 2020

1.3. We continue with new structure and PRFoods keeps owning fish farming units Överumans Fisk AB and Redstorm OÜ (Saaremere Kala AS is holding new farming permit applications, in future the licences will be transferred to operational units) and processing units Heimon Kala OÜ in Estonia and John Ross Jr/Coln Valley in Scotland.

We have followed previously agreed action plans to emerge from crisis:

Companies financial costs have risen due to higher debt capital, while one must note that significant portion of debt is convertible or related to related parties, that can be converted together with interest, in order to support company's equity. Majority shareholders have opened additional credit limit to the company. We believe that after PRFoods has demonstrated that it can operate with profit after sale of Finland, cost of capital for company will also decrease.

The effect of sale of Heimon Kala Oy will be published in Q1 2022 report after the sale on 1.3.

KEY RATIOS

INCOME STATEMENT 

BALANCE SHEET

Consolidated Statement of Financial Position

Consolidated Statement of Profit or Loss And Other Comprehensive Income

Indrek Kasela

AS PRFoods

Member of the Management Board

Phone:+372 452 1470

investor@prfoods.ee

www.prfoods.ee

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